The National Retail Federation (NRF) is reporting today that consumer spending on holiday shopping this year will be up only 1.9 percent over last year. And NRF points out that this figure represents the lowest increase in planned consumer holiday spending since its survey on the subject began in 2002.
OK, that’s not great news, but it is news, so why not work with it? One thing it tells you is that consumers are not canceling the holidays this year; they’ll shop but they’ll shop conservatively.
So, take this fact to the bank. Either hire a new person or appoint an existing employee to help consumers shop within their budget. Put up a sign that encourages shoppers to tell your store’s personal shopper — call him or her your Budget Wizard — what their budget is, what type of gifts they need and for whom. Then, let your Budget Wizard find items in your store that fit the budget and the general concept of what the customer wants to buy.
Segregate merchandise in your store by price, so that you have an Under $20 gift table, an Under $50 gift table and so on. In other words, make it easy on your customers to find gifts that fit within their budget.
Let’s face it: Out of pure necessity, consumers this year will shop within their budgets more than in previous years. So, don’t lose sales by hoping they’ll forget their budgets and splurge. Economically, it’s not that kind of year.
So, assist your customers in their efforts to buy great gifts they can afford.
By the way, the NRF 2008 Consumer Intentions and Actions Survey reveals that U.S. consumers will spend an average $832.36 on holiday shopping this year.
More importantly, consumers say one factor will play the biggest role in buying decisions this year: price. Forty percent of shoppers say that sales or promotions will be the largest factor in determining where to shop.
The average person this year will spend $466.13 on gifts for family; $94.52 on friends; $26.70 on co-workers; and $43.50 on other gifts. Spending is expected to be particularly weak among young adults, with 18- to 24-year-olds planning to spend $50 less on gifts than a year ago.
And — Boo! — more than 40 percent of consumers will start their holiday shopping engines before Halloween. Is your store ready? It’s scary to think it’s not.
The NRF survey was conducted by BIGresearch.